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Sports betting delivers a new jackpot for Deadwood casinos

The addition of glitzy betting areas surrounded by massive TVs showing all manner of sporting events has provided Deadwood a jolt of new energy, new clientele and new revenues.

Sports betting delivers a new jackpot for Deadwood casinos
Sports betting is the new multi-million-dollar addition to the gaming landscape in Deadwood, S.D. The latest odds are displayed on monitors, and bets can be placed at manned betting booths or self-serve computer kiosks. Like other Deadwood casinos, Cadillac Jack's Gaming Resort outsources its odds-making and bet calculation systems to national online sports book firms like BetMGM. (Photo: Bart Pfankuch / South Dakota News Watch)

DEADWOOD, S.D. – If casino operators in Deadwood could conjure the ideal target audience for their sports betting operations, Lance Chapdelaine and his buddies from Colorado would be the proverbial jackpot.

The 25-year-old banker and several pals made the Tin Lizzie Gaming Resort their home base on a weekend in early March, driving five hours from Haxtun, Colorado, for a bachelor party in the Black Hills. They stayed in the hotel, ate and drank on property and placed bets on sporting events during their multi-day stay.

“There’s nothing better than drinking a couple beers with your friends while watching college basketball, and betting makes it more intense and fun to watch the games,” Chapdelaine said.

The small cadre of Coloradans was happy to be part of what has quickly become a lucrative new addition to the gaming scene in Deadwood, where gambling was legalized in 1989 and expanded in 2015 to allow roulette, keno and craps.

South Dakota voters approved Deadwood sports betting in 2020 via a constitutional amendment.

Since its implementation in September 2021, the number of sports books has risen from two to seven. The amount wagered also has risen steadily, as have casino revenues from sports wagering. Deadwood sports books saw their "handle," or the total amount bet, top $1 million in a month for the first time in October 2023.

With a $1,000 betting bankroll, Chapdelaine had lost money in the casino but was doing better in the sports book at Tin Lizzie. Even though sports betting is legal in Colorado, the casino scene and upbeat vibe of Deadwood lured him in for the bachelor party as well as three previous visits to the western South Dakota gaming mecca in the past two years.

"We're small-town kids, so the environment in Deadwood is attractive to us," Chapdelaine said as he and his friends watched college basketball at the Tin Lizzie sports book, had bratwursts for lunch and filled their glasses from a 4-foot vertical plastic tube known as the beer tower. "This is the place to be, I think."

Four men from Colorado pose for a photo at a sports betting site in Deadwood, South Dakota.
These visitors from Colorado — Jayden Thompson, Lance Chapdelaine, Wyatt Workman and Joey Stieb — came to the Tin Lizzie Gaming Resort in Deadwood, S.D., in early March for a bachelor party and to bet on sports. The sports book is contiguous to Paddy O'Neill's Irish Pub and Grill, whose wait staff ferries drinks and dishes to patrons. (Photo: Bart Pfankuch / South Dakota News Watch)

Sports betting on rise in Deadwood and U.S.

According to the South Dakota Department of Revenue, gamblers in Deadwood wagered $2.7 million on sports in 2021, $7.2 million in 2022 and $9 million in 2023, a 26% increase from the year prior.

While the money bet on sports in Deadwood is dwarfed by slot machine play ($1.45 billion bet in 2023) and wagering on table games ($89.7 million bet in 2023), the addition of glitzy betting areas surrounded by massive TVs showing all manner of sporting events has provided Deadwood a jolt of new energy, new clientele and new revenues.

"If success is measured by positive guest experience and robust enthusiasm, then Deadwood sports betting is a smashing success," David Knight, vice president of operations for Liv Hospitality, which manages two Deadwood casinos, wrote to News Watch in an email.

"It's undeniable that sports betting has turned Deadwood into a more attractive destination as sports has a unique power of bringing complete strangers together to socialize, watch games and enjoy uncommon camaraderie in a vibrant and exciting atmosphere."

The consistent growth of sports betting in Deadwood dovetails with a massive rise in sports wagering across the country, as the availability and interest in gambling on sporting events have exploded since the U.S. Supreme Court deemed sports gaming legal in 2018.

According to a report from the American Gaming Association, bettors in the U.S. gambled $120 billion on sports in 2023, a 28% jump from the year prior. Revenue for sports gambling operators also rose sharply to $10.9 billion in 2023, a nearly 45% increase over 2022. In all, 38 states and the District of Columbia have legalized sports betting, and much of that betting is done online.

Good/bad of increased sports betting

In South Dakota, that increased sports betting has helped turn Deadwood's gaming industry into a major contributor of tax money to a variety of recipients.

“Deadwood casinos contributed over $16.6 million in gaming tax revenue for historic preservation, tourism promotion, Lawrence County and its municipalities and schools, the State of South Dakota’s general fund and other governmental entities,” the Deadwood Gaming Association said in 2023. 

David Knight quote on sports betting in Deadwood, South Dakota

But the rapid rise of sports wagering also has raised concerns that it can lead to gambling addiction, mental health problems or other unhealthy behaviors, especially among young men.

2023 Rutgers University study of gambling trends in New Jersey, the nation’s top state for sports wagering, revealed alarming data about the propensity of some bettors to become addicted to gaming. 

Surveys showed that most sports bettors tended to be men under 45 and that more than 90% gambled with moderate or high frequency. The report’s findings suggest that people who bet on sports were prone to a variety of negative behaviors.

The sports book at Tin Lizzie Gaming Resort in Deadwood, S.D., features comfy seating and an array of giant TVs and monitors to watch and bet on sports, including a vertical pillar of screens in the center of the room. (Photo: Bart Pfankuch / South Dakota News Watch)

“Those who bet on either sports or horses were significantly more likely than others to use tobacco, alcohol, and/or illicit drugs, binge drink, report problems with drugs/alcohol, and engage in all types of addictive behaviors,” the report stated. “In addition, those in the three youngest age categories, ages 18 to 44, were overrepresented among high-risk problem gamblers.”

Anyone concerned about their gambling can get help over the phone by calling the South Dakota Lottery Problem Gambling Helpline at 1-888-781-HELP (888-781-4357.)

Changing the game in Deadwood

Sports betting has led to some fundamental changes in the gaming industry in Deadwood, according to Josh Thurmes, general manager at Tin Lizzie.

While the gender breakdown among casino patrons used to be slightly more female than male, sports betting has attracted more men to Deadwood casinos and evened up the gender breakdown, he said. Patrons in sports books also tend to skew a bit younger than in the casino as a whole.

But the changes run deeper than that, Thurmes said.

For example, the traditional gaming high season in Deadwood for years has followed that of the larger Black Hills tourism market, running roughly from May to September.

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The incredible interest in betting on college and NFL football games has provided Deadwood with a burst of new patrons from the start of football season in September through the college football playoffs in January and onto the Super Bowl in early February, Thurmes said. The upcoming March Madness men’s college basketball tournament will also bring a jump in patrons to the sports books at a time when gaming traditionally slowed down in Deadwood, Thurmes said.

“Summer is still peak season, but sports betting is definitely driving guests to Deadwood in non-typical peak times,” Thurmes told News Watch.

During major sporting events, the sports books are even able to charge patrons a fee to reserve a seat to watch the big games on multiple massive TV sets and monitors, and operators compensate them with free play offers in the casino, he said.

A couple places bets on sporting events in the sports book at Cadillac Jack's Gaming Resort in Deadwood, S.D. (Photo: Bart Pfankuch / South Dakota News Watch)

Longer long weekends in Deadwood

Besides attracting a new kind of gambler and extending the busy season, sports betting also has pushed gaming action on days when casinos are traditionally slow.

“In the fall, you’ve got college football on Saturdays and the NFL on Sundays, Sunday nights, Mondays and now Thursdays,” Thurmes said. "During college bowl season, there’s a game on every night for weeks at a time."

As a result, the Deadwood tourism weekend that traditionally ran from Friday night to Sunday morning can extend another day or two from sports wagering opportunities on Sundays and Mondays.

Furthermore, sports betting has energized food, beverage and hotel spending at casinos that house sports books, creating a space where patrons can place a bet and then spend as much as three hours watching their game of interest, Thurmes said.

“One of the big things we’ve seen is all the residual revenue that we’re getting from sports betting,” Thurmes said. “We see stronger food and beverage spending, and sports betting can carry over into slots or table game play.”

A sports betting kiosk at a Deadwood casino
The sports book at Cadillac Jack's Gaming Resort in Deadwood, S.D., fits seamlessly into the rest of the casino, offering patrons the ability to gamble on games and slots at the same time. (Photo: Bart Pfankuch / South Dakota News Watch)

The launch of sports betting coincides with an overall increase in visitation and spending in Deadwood in the past couple years, said Amanda Kille, marketing director for the Deadwood Chamber of Commerce and Visitors Bureau.

As Deadwood hotel occupancy and tourism spending both rose in 2023, the city also saw a roughly 2% increase in local foot traffic as estimated by cellphone monitoring company Placer.ai, Kille said.

“All those increases are tracking and reinforcing each other,” Kille told News Watch in an interview. “Sports betting is another amenity, and that’s always a great thing for Deadwood.”

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Thurmes said the next advancements in Deadwood sports betting would likely be an expansion of the types of sports able to wager upon and new ways for bettors to place bets on elements of games even after the events have started.

Effort to expand sports wagering rejected

Michael Shaw, 29, is a Rapid City resident who would visit Deadwood once a year but who now makes the 40-minute drive as many as five times a month to place bets on sporting events. He typically makes long-shot, multiple game parlays that can deliver a rare but tasty payoff of up to $1,000 on a $20 bet.

Sports betting is attractive because he’s a fan of watching sports on TV and likes the slower pace of wagering on it.

“I’ve always been a big sports guy and it’s more fun to watch the games this way,” Shaw told News Watch. “Plus, you can lose your money in roulette in 10 seconds and with this, your bet takes two hours or more to come in.”

Shaw said he would like South Dakota to approve sports betting on the internet or by phone so he doesn’t have to travel to Deadwood to place a wager.

Two prior legislative attempts to expand sports betting to kiosks in licensed bars and restaurants outside Deadwood failed in recent years, said Matt Krogman, a lobbyist for the South Dakota Licensed Beverage Dealers and Gaming Association. The remote kiosks would have allowed sports betting through existing gambling operations at Deadwood casinos, Krogman said.

Sports betting kiosks in areas of East River, for example, would keep gaming and tax revenues in the state rather than allow them to go to Iowa from sports bets placed at the Grand Falls Casino and Golf Resort just east of Sioux Falls or the Hard Rock Hotel and Casino in Sioux City, Iowa, he said.

Shaw, meanwhile, said he'll continue to drive to Deadwood to place his long-shot bets, even though he'd like to do so from his home or elsewhere in Rapid City.

“I get what they’re trying to do. But it would be nice to allow mobile betting outside Deadwood,” Shaw said. “It would make it a lot more convenient for people, that’s for sure.”